The comparative balance sheet of Sky-Mate Luggage Company at December 31, 2007 and 2006, is as follows:

An examination of the income statement and the accounting records revealed the following additional information applicable to 2007:
a. Net income, $140,500.
b. Depreciation expense reported on the income statement: buildings, $21,000; machinery and equipment, $8,500.
c. Patent amortization reported on the income statement, $4,000.
d. A building was constructed for $175,000.
e. A mortgage note for $70,000 was issued for cash.
f. 2,000 shares of common stock were issued at $51 in exchange for the bonds payable.
g. Cash dividends declared, $60,000.
Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operatingactivities.

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Dec. 31, 2007 Dec. 31, 2006 Assets Cash Accounts receivable (net) Inventories Prepaid expenses Land Buildings Accumulated depreciation-buildings Machinery and equipment Accumulated depreciation-machinery & equipment Patents Total 184,200 252,100 300,200 9,500 120,000 600,000 (215,000) 310,000 (83,500) 50,000 1,527,500 S 165,400 224,300 348,700 8,000 120,000 425,000 (194,000) 310,000 (75,000) 54,000 $1,386,400 Liabilities and Stockholders' Equity 284,300 15,000 19,500 70,000 295,700 10,000 22,500 Accounts payable (merchandise creditors) Dividends payable Salaries payable Mortgage note payable, due 2027 Bonds payable Common stock, $1 par Paid-in capital in excess of pa Retained earnings Total 102,000 20,000 50,000 886,200 $1,386,400 22,000 150,000 966,700 1,527,500 stock